UK-based independent Premier Oil says it has lined up key "world class" contractors to provide the vessel and infrastructure for its Falklands Islands Sea Lion development, after completing pre-front end engineering and design on the project.
Sea Lion is about 220km north of the Falkland Islands in 450m water depth. The project's phase 1a is expected to see some 160 MMbbl developed via a US$1.8 billion to first oil subsea to floating production, storage and offloading (FPSO) vessel project, according to a Premier Oil investor presentation in September, with about 14 wells.
Premier Oil had initially planned an FPSO for the field, which looks set to be the first to be developed offshore the contested Falkland Islands, and then looked at a tension leg platform. But it has since opted for a smaller phase 1 floating production development, with shuttle tanker, followed by a phase 2 using a tension leg platform. The firm is now also looking for a farm-in partner.
A full update on the Sea Lion project is due in Q1 following results of the firm's latest four-well exploration program in the basin.
Premier's progress on Sea Lion comes as the firm continues to cut costs, amid the oil price down turn. Outlining its Q3 update, the firm said it has made 25% cost reductions in 2015, with operating costs standing at about US$16/boe, with a further 5-10% savings expected in 2016.
Spending in 2016 will be reduced as it will finally see completion of the West of Shetland, minimal facilities Solan development, which is due on stream before the year end, subject to weather. It had originally due due on stream in 2014.
Premier is also close to finalizing its Vette FPSO project on the Norwegian Continental Shelf. Work with contractors has helped reduce costs, the firms says, and two development concepts are now under consideration, with final selection of the preferred host facility due to be made before year end 2015, and project sanction expected in 1H 2016.
Premier Oil is also progressing its Catcher FPSO project, which it says is on schedule and on budget. The 2015 subsea program, including installation of the pipeline end manifold and two templates at Catcher and Burgman, and a 60km export pipeline, has completed and initial development drilling results have been encouraging, says Premier. Subsea flowline bundles, buoy and mid water arches will be installed next summer. Fabrication of the hull and topsides is ongoing in Asia. Despite a delays on construction of the hull, mitigating actions by FPSO contractor BW Offshore is helping "safeguard" the sail-away date, with first oil scheduled for 2017.
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